Current models for understanding the spatial diffusion of innovation exhibit significant limitations when it comes to explaining how transformative innovations in sectors of the foundational economy travel between cities and countries. Transformative innovations in infrastructure sectors like water, energy, or waste management are typically not reducible to single products or technologies but rely on a set of complementary organizational, social, policy, and demand-side innovations. Their spatial diffusion thus requires nonlinear socially embedded institutionalization processes that include regulative, political, and cultural changes, extending well beyond the knowledge- and market formation dynamics emphasized in conventional diffusion models. This article develops a conceptual model that specifies the socio-technical contextualization and de-contextualization processes that take place every time an innovative infrastructure innovation travels between places. It disentangles the spatial complexities involved in the packaging of social and technical elements into coherent configurational templates that enable the spatial diffusion of transformative innovations. We apply our framework to a case study of the diffusion of circular district-scale sanitation systems (CDSS) in Europe, drawing on fifty-four expert interviews and an extensive database of secondary material. Our findings show how a template for CDSS was continuously optimized and standardized through spatially scattered experiments, pilot and demonstration projects, and high-profile lighthouse initiatives spread across Europe. Based on our findings, we elaborate a three-stage phase model for the institutionalization of configurational templates. The model provides inroads for assessing diffusion challenges in other sectors where transformative innovation is intimately coupled with socio-technical reconfiguration.